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PA Bulletin, Doc. No. 08-192


Payments to Nonpublic Nursing Facilities; Final Rates for State Fiscal Year 2007-2008

[38 Pa.B. 669]
[Saturday, February 2, 2008]

Purpose of Notice

   The purpose of this notice is to announce the Department of Public Welfare's (Department) final annual case-mix per diem payment rates for State Fiscal Year (FY) 2007-2008 for nonpublic nursing facilities that participate in the Medical Assistance (MA) Program.

   As required by the case-mix payment methodology set forth in 55 Pa. Code Chapter 1187, Subchapter G (relating to rate setting), the Department annually sets a new MA per diem rate for each nonpublic nursing facility. Each facility's annual per diem rate is comprised of four components: resident care; other resident related; administrative; and capital.

   Section 1187.96 (relating to price- and rate-setting computations) states that the sum of the rate components will be multiplied by a budget adjustment factor (BAF). The BAF is based on the funding that is appropriated for nursing facility services in the General Appropriations Act and ''will be determined in accordance with a formula specified in the Commonwealth's approved State Plan.'' 55 Pa. Code § 1187.96(e)(2)(iv).

   The Federal Centers for Medicare and Medicaid Services (CMS) approved State Plan Amendment (SPA) 07-007 on September 5, 2007. The SPA states that the BAF for rate-setting year 2007-2008 shall limit the estimated aggregate increase in the Statewide day-weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities over the 3 year period commencing July 1, 2005, and ending June 30, 2008, from the Statewide day-weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities in rate year 2004-2005 to 10.12%. The formula for this BAF as it applies to nonpublic nursing facilities is as follows: (the nonpublic nursing facilities' share of total appropriated funds plus the estimated annual patient pay amount) divided by the estimated acuity adjusted annual payments of $3,147,260,444 which equals .93194.

   The final FY 2007-2008 annual per diem rates are available on the Office of Medical Assistance Programs' (OMAP) website at Providers/MedicalAssistance/DoingBusiness/LTCCase MixInfo/. As they become available, the adjusted quarterly rates for the October, January and April quarters of FY 2007-2008 will be accessible on the OMAP website, at local county assistance offices throughout this Commonwealth or by contacting Tom Jayson, Policy Unit, Office of Long-Term Living at (717) 705-3705.

   The data that the Department used to calculate the rates is available on the OMAP website. Because some of the audited costs used in the database are taken from audit reports for fiscal periods beginning prior to January 1, 2001, the Department revised the audited costs in the database in accordance with 55 Pa. Code § 1187.91 (1)(iv)(D) (relating to database) to disregard certain audit adjustments disallowing minor movable property or linen costs. The criteria that the Department used to make these revisions are available on the OMAP website or by contacting Tom Jayson.

Public Process

   The Department published a notice announcing its proposed case-mix per diem payment rates for FY 2007-2008 at 37 Pa.B. 5573 (October 13, 2007) and invited interested persons to submit comments. One commentator submitted a response to the notice. For the most part, the response reiterated the same concerns and objections that had been raised by the commentator and others during the extensive public process relating to the June 2006 rulemaking process. The Department considered the comments included in the letter when composing this final rate notice.


   Following publication of this notice, the Department will send rate letters to each MA nursing facility to notify the facilities of their final rates for FY 2007-2008. The rate letter will also advise each facility that it may file an administrative appeal if the facility believes that the Department made any errors or otherwise disagrees with its final rates for FY 2007-2008. A provider's appeal must be in writing and filed with the Department's Bureau of Hearings and Appeals, P. O. Box 2675, Harrisburg, PA 17105, within 33 days of the date of the Department's letter notifying the facility of its final rates. Facilities should refer to 67 Pa.C.S. Chapter 11 (relating to medical assistance hearings and appeals), and to the Department's regulations at 55 Pa. Code Chapter 41 (relating to medical assistance provider appeal procedures), for more detail regarding their appeal rights and the requirements related to their written appeals.

Fiscal Impact

   The change in payment rates, effective July 1, 2007, and the quarterly case-mix adjustments are estimated to cost the Department $75.794 million ($34.746 million in State funds) in FY 2007-2008.

Public Comment

   Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Office of Long-Term Living, Attention Gail Weidman, P. O. Box 2675, Harrisburg, PA 17105. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.

   Persons with a disability who require an auxiliary aid or service may submit comments using the AT&T Relay Services at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


   Fiscal Note: 14-NOT-539. (1) General Fund; (2) Implementing Year 2007-08 is $34,746,000; (3) 1st Succeeding Year 2008-09 is $37,905,000; 2nd Succeeding Year 2009-10 is $37,905,000; 3rd Succeeding Year 2010-11 is $37,905,000; 4th Succeeding Year 2011-12 is $37,905,000; 5th Succeeding Year 2012-13 is $37,905,000; (4) 2006-07 Program--$695,279,000; 2005-06 Program--$817,890,000; 2004-05 Program--$476,116,000; (7) Medical Assistance--Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover theses increases.

[Pa.B. Doc. No. 08-192. Filed for public inspection February 1, 2008, 9:00 a.m.]

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